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BUFFALO COAL CORP - Amendments to credit facility, commencement of strategic review and cautionary announcement

Release Date: 20/03/2018 09:00
Code(s): BUC     PDF:  
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Amendments to credit facility, commencement of strategic review and cautionary announcement

Buffalo Coal Corp.
(Registration number: 001891261)
(External company registration number: 2011/011661/10)
Share code on the TSX Venture Exchange: BUF
Share code on the JSE Limited: BUC
ISIN: CA1194421014
(“Buffalo Coal” or “the Company”)


        AMENDMENTS TO CREDIT FACILITY WITH INVESTEC BANK LIMITED,
       COMMENCEMENT OF STRATEGIC REVIEW PROCESS AND CAUTIONARY
                           ANNOUNCEMENT

The Company announced today that Buffalo Coal Dundee Proprietary Limited (“Buffalo Coal Dundee”),
the Company’s wholly-owned subsidiary, has entered into an amendment (the “Amendment”) to the
term loan and revolving credit facility with Investec Bank Limited (“Investec” or the “Lender”) dated
November 17, 2011, as amended from time to time (the “Investec Facility”).

Pursuant to the Amendment, among other things and subject to customary terms and conditions:

   -   the working capital facility under the Investec Facility was increased by R16 million
       (approximately C$1.75 million) (the “Supplemental Credit”) to R96 million (approximately
       C$10.5 million), with the aggregate Investec Facility increasing from R220 million (approximately
       C$24 million) to R236 million (approximately C$26 million);

   -   the Supplemental Credit is available subject to the provision of a utilization report acceptable to
       the Lender;

   -   the availability period of the working capital facility was extended to June 22, 2018;

   -   the maturity date for any amounts drawn against the Supplemental Credit will be June 29, 2018;

   -   Buffalo Dundee will immediately repay to Investec the amount of R36.6 million (approximately
       C$4 million) currently due to Investec under the existing Investec Facility, of which R30 million
       reduces the aggregate amount outstanding on the Investec Facility from R200.3 million
       (approximately C$22 million) to R170.3 million (approximately C$19 million), with the remaining
       R6.6 million (approximately C$0.75 million) applied to the mine royalty payment in the amount
       of R6.1 million and the balance of R0.5 million (approximately C$0.05 million) applied to default
       interest, all of which were due and payable on March 16, 2018;

    -  the due date for the principal payment amount of R7.5 million (approximately C$0.8 million) due
       on March 31, 2018 will be extended to June 29, 2018; and

    -  Investec agrees not to exercise its acceleration rights with respect to any existing events of
       default under the Investec Facility and will appoint a technical advisor until June 30, 2018 to
       provide certain monthly reports to Investec.

As a further condition to the Amendment, the Company has retained Northcott Capital Limited as its
financial advisor to conduct a review of its strategic options. The Company cautions that there are no
guarantees that the strategic review will result in a transaction or if a transaction is undertaken, as to its
terms or timing. The Company does not intend to disclose developments with respect to the strategic
review process unless and until a definitive transaction or strategic option has been approved, unless
otherwise required by law or disclosure of which is deemed appropriate. Shareholders of the Company
are advised to exercise caution when dealing in the Company’s securities until a further announcement
is made.

About Buffalo

Buffalo is a coal producer in southern Africa. It holds a majority interest in two operating mines through
its 100% interest in Buffalo Coal Dundee, a South African company which has a 70% interest in Zinoju.
Zinoju holds a 100% interest in the Magdalena bituminous mine and the Aviemore anthracite mine in
South Africa. Buffalo has an experienced coal-focused management team.

Cautionary Notes:

This press release contains “forward-looking information” within the meaning of applicable Canadian
securities legislation. Forward-looking information includes, but is not limited to, the outcome of the
strategic review process being commenced by the Company. Generally, forward-looking information
can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not
expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or
“does not anticipate”, or “believes”, or variations of such words and phrases or state that certain
actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be
achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or achievements of Buffalo to be
materially different from those expressed or implied by such forward-looking information, including but
not limited to: general business, economic, competitive, foreign operations, political and social
uncertainties; a history of operating losses; delay or failure to receive board or regulatory approvals;
timing and availability of external financing on acceptable terms; not realizing on the potential benefits
of the proposed transaction; conclusions of economic evaluations; changes in project parameters as
plans continue to be refined; future prices of mineral products; failure of plant, equipment or processes
to operate as anticipated; accidents, labour disputes and other risks of the mining industry; and, delays
in obtaining governmental approvals or required financing or in the completion of activities. Although
Buffalo has attempted to identify important factors that could cause actual results to differ materially
from those contained in forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that such information will prove
to be accurate, as actual results and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on forward-looking information.
Buffalo does not undertake to update any forward-looking information, except in accordance with
applicable securities laws.

Neither the Toronto Venture Exchange, nor its regulation services provider (as that term is defined in the
policies of the exchange), accepts responsibility for the adequacy or accuracy of this release.

FOR FURTHER INFORMATION PLEASE CONTACT:

Rowan Karstel                                            Graham du Preez
Chief Executive Officer                                  Chief Financial Officer
Email: rowan.karstel@buffalocoal.co.za                   Email: graham.dupreez@buffalocoal.co.za

Johannesburg
20 March 2018

Designated Adviser
Questco Corporate Advisory (Pty) Ltd

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